Workers at a business process outsourcing center in Dalian input data to computers. (Gen Hashimoto)Zhang Yue explains what work is like at Chuo Electric Works Ltd. to students at Kinki University in Higashi-Osaka, Osaka Prefecture. (Tetsushi Yamamura)
Editor's note: This concludes a two-part series on integration of Japanese and Chinese businesses.
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At a busy office in Dalian, China, it is not uncommon to see a female worker weeping over scrawled handwriting on a document.
The office is a base for InfoDeliver, a Tokyo-based company that is the largest business process outsourcing (BPO) concern in Japan.
Japanese manufacturers forced to increase efficiency have been turning to the young and cheap labor in China. But now, other Japanese companies are using Chinese workers to handle even clerical work, leading to closer business ties between Japan and China.
In InfoDeliver's room that handles operations for Taiyo Life Insurance Co., about 30 women in their 20s sit in front of computers to enter handwritten diagnoses that are the basis for making insurance payments. And they obviously take their jobs very seriously.
"Their eagerness to improve themselves is incredible. If they come across characters they cannot read because of bad handwriting or peculiar habits, they will cry in anguish," said Yasuo Kumonari, 55, of Taiyo Life Insurance's claims adjustment section.
Because the women are able to correct misspellings or find dropped characters, their accuracy is considered greater than that of workers in Japan.
Several tens of thousands of young Chinese fluent in Japanese work for Japanese clients at BPO companies in a high-tech industrial complex in Dalian.
Not only is the volume of work being outsourced growing, but the content of the work is also increasing in importance.
Taiyo Life Insurance turned over the work to InfoDeliver in 2008. The amount of work reaches 13,000 cases a month.
The entered data was initially used only as supplementary materials. But since October, insurance payments have been checked based on that data.
InfoDeliver has 1,500 employees in Dalian who can handle a wide range of activities.
Sompo Japan Insurance Co. has used its Dalian base to handle accident reports.
Agents fill out handwritten reports that include about 300 items, and those reports are faxed to the Dalian base.
Each report is entered into a computer within six minutes. Ten minutes after a client has contacted the company, an agent in charge of handling the accident report has the information on a computer screen.
At education service provider Benesse Corp., postcard applications to its Shinken Seminar correspondence sessions that are received at a Tokyo post office are partially scanned and sent to Dalian, where the data is entered into a computer.
The method eliminates one day from the time it takes to mail out learning materials after receiving the applications.
Although Japan Post Service Co. has not made public its internal operations, information on reports for those who have moved and want mail forwarded is believed to be handled at the Dalian base.
Companies in Japan and China are also becoming more involved in each other's management.
In late October, a meeting was held at the Tokyo headquarters of Renown Inc. to help Chinese business people absorb the Japanese way of management.
In attendance were about 40 visiting senior officials from Shandong Ruyi Science & Technology Group, a Jining, Shandong province-based textile company that acquired about a 40-percent stake in Renown in July.
Over a two-day period, Renown employees served as lecturers at a Tokyo hotel to pass on how business was conducted.
The topics included periods when corrections had to be made in budget management and reasons for monthly sales differences.
Opinions were exchanged to seek a compromise between the Japanese and Chinese ways of doing business.
Toshiharu Oogiri, 53, the Renown official in charge of the company's Chinese strategy, built up a relationship of trust with Qiu Yafu, 52, chairman of the Shandong Ruyi Science & Technology Group, after repeated discussions.
"I was told they would implement a Japanese-style management," Oogiri said.
Preparations are being made for the first retail outlet in China to be operated by a Renown-Shandong joint venture. The eventual goal is to have 2,000 outlets in a decade.
One area where compromise is needed is in design. Oogiri said, "There is a way to take advantage of Renown's strengths in the creative area."
However, Shandong officials want design work conducted the Chinese way.
"Although Chinese consumers have specific tastes, Japanese companies do not want to change their way of doing things," said a senior Chinese official who came to Japan. "They should move closer to the needs of China by moving design work to the mainland."
According to officials of Recof Corp., which provides advice on mergers and acquisitions, there were 26 cases in 2009 of Chinese companies acquiring Japanese companies. This year, there have already been 36 cases through November.
Japanese companies are also reaching out to Chinese companies.
Since 2008, major trading company Itochu Corp. has invested in a number of Chinese and Taiwanese conglomerates and has gained rights to intervene from a management standpoint.
In 2009, Itochu obtained a 28-percent share of Shanshan Group Co. based in Ningbo, Zhejiang province.
The Shanshan Group has expanded its operations from apparel, its main line of business, to financial services, real estate, lithium batteries and solar cells.
In thinking long-term, company Chairman Zheng Yonggang said, "There are more things we can learn from Japanese companies, which stress trust, than from the U.S. companies that Chinese companies have used as models."
Although relations between Japan and China have wavered due to the Senkaku Islands incident, Zheng said: "Minor disputes will eventually be resolved. No one in the business sector wants to see the relationship between Japan and China worsen, and there is very little actual effect (from the Senkaku incident)."
It is rare for a Japanese company to invest directly in a conglomerate group. Itochu officials feel they can gain the "fruits" of various growth sectors by partnering with a conglomerate.
"We want the two companies to engage in projects on a scale of 10 billion yuan (about 120 billion yen)," Zheng said.
Chinese studying in Japan have also helped to bridge the gap between the two nations.
In 2009, there were 6,333 Chinese students in Japan who found work in Japanese companies, double the figure of five years ago. They have especially had a large presence in small and medium-sized companies.
An association of such companies in Osaka Prefecture held a job fair in October.
The only individual in charge of the booth for Chuo Electric Works Ltd., which manufactures measuring equipment, was Zhang Yue, 28, a third-year employee from Dalian.
"Zhang understands what kind of people we are looking for," said Yoshio Hatano, 63, the company's president.
A 26-year-old Chinese student who visited the booth said, "It is very comforting to have someone who understands our situation."
Of the 44 employees at Chuo Electric Works, eight are Chinese. And three of the six new recruits picked this year are Chinese.
"Unlike major companies where one has to do what one has been assigned, there are many areas where we can contribute," Zhang said.
In late September, Nagaoka International Corp., a waterworks equipment manufacturer based in Izumiotsu, Osaka Prefecture, was presented a technology award at the World Water Congress of the International Water Association held in Montreal.
Standing on the stage to receive the award along with company President Hitoshi Mimura, 61, was No Hayashi, 52, who was born in China but is now in charge of the company's water business.
After returning to Japan, Hayashi was made a director, the first foreigner to reach that status.
He had worked for a major Japanese waterworks consulting company and acquired Japanese citizenship.
Last year, he moved to Nagaoka, which has 130 employees.
"A big reason was that the president trusted me enough to do whatever I wanted," Hayashi said.
(This article was written by Tetsushi Yamamura, Kyoko Isa and Tokuhiko Saito.)